Gun controls then, like other restrictions and prohibitions, have their biggest effect on those who agree with them and on the unlucky few scofflaws caught by the powers-that-be, and are otherwise mostly honored in the breach. As a result, gun laws intended to reduce the availability of firearms are likely to leave those who most vigorously disagree with them disproportionately well-armed relative to the rest of society. That raises some interesting prospects in a country as politically polarized and factionalized as the United States.

That gun restrictions are widely disobeyed is a well-documented fact. I’ve written before that Connecticut’s recent “assault weapons” registration law achieved an underwhelming 15 percent compliance rate, and New York’s similar requirement resulted in 5 percent compliance. When California imposed restrictions on such weapons in 1990, at the end of the registration period “only about 7,000 weapons of an estimated 300,000 in private hands in the state have been registered,” The New York Timesreported. When New Jersey went a step further that same year and banned the sale and possession of “assault weapons,” disobedience was so widespread that the Timesconcluded, “More than a year after New Jersey imposed the toughest assault-weapons law in the country, the law is proving difficult if not impossible to enforce.” That’s in states with comparatively strong public support for restrictions on gun ownership.

Across the Atlantic, despite varying but generally tight laws on gun ownership, “Contrary to widely-accepted national myths, public gun ownership is commonplace in most European states,” according to the Geneva-based Small Arms Survey. How can that be? “Public officials readily admit that unlicensed owners and unregistered guns greatly outnumber legal ones,” possibly because of “a pervasive culture of non-cooperation with public authorities” in many places.

Just a thought, but existing examples of defiance of gun laws in the United States might be an indication that “a pervasive culture of non-cooperation with public authorities” is exactly what we should expect in response to any future successes gun controllers might achieve legislation-wise. Read the rest of this entry »

‘None of these people have any incentive to undertake the job of decreasing the complexity of the tax system.’

primatologist writes: If most people in the US knew the truth about the tax system in their country, there would be blood in the streets. Most individuals file a very simple federal income tax return – perhaps they take a few deductions for their mortgage interest, medical costs and the like. But this annual experience for the vast majority of Americans gives them a very skewed view of the great mass of the US tax system – it is the tiniest visible sign of an enormous tumor that grows beneath the surface, invisible to most US citizens and tax payers.

“This is how it works: To escape the high tax rates on business activities in the US, armies of lobbyists work ceaselessly to insert arcane, narrow exceptions and exemptions into federal and state tax laws at the legislative level. The exceptions and exemptions are as narrow as possible and often use very convoluted and technical language. The use of opaque language is intentional: it helps legislators avoid the kind of political trouble that comes from handing out tax exemptions.”

Two facts that are rarely discussed by the US media and which never come to the attention of the majority of US individual taxpayers illustrate this: The US has by far the highest corporate income tax rate of any developed country (and among the highest marginal tax rates for individuals who live in high tax states), and the US has an incredibly large and complex structure of tax laws. While most US taxpayers don’t know about the relatively high rates of US taxation, the crucial reality of the US tax system that is hidden from almost everyone is the insane complexity of the US tax code that applies to investment and business activities.

“Why uncertainty? Because as the tax laws and regulations become more and more complex, and the language in which they are expressed becomes more and more divorced from normal usage, only very intelligent people who spend all their time doing nothing but learning and manipulating tax language can even begin to know what the laws and rules mean.”

This is how it works: To escape the high tax rates on business activities in the US, armies of lobbyists work ceaselessly to insert arcane, narrow exceptions and exemptions into federal and state tax laws at the legislative level. The exceptions and exemptions are as narrow as possible and often use very convoluted and technical language.

The use of opaque language is intentional: it helps legislators avoid the kind of political trouble that comes from handing out tax exemptions. (There is also the factor that legislators all play the game of “I’ll vote for your campaign contributor’s tax exemption if you’ll vote for mine.”) Tax authorities (that’s the IRS for the federal government, but it happens at the state and local level, too, in high-tax states and cities) create voluminous regulations to implement these tax laws. Lobbyists also work to influence that process, as well as returning to the legislature to create exceptions to the exceptions to the exceptions created in the regulations.

“Trying to undo the complexity of the tax code would reveal all this incredible responsive complexity: And it would cause massive economic losses. Trillions and trillions of dollars worth of value is invested in ways that are structured in response to the complexity of our tax laws. Without those giant stacks of tax rules and exceptions and exceptions to exceptions, etc., those investment and business operations structures would not make sense legally or economically.”

Meanwhile, “tax planning” to take advantage of this constantly growing and increasingly complex web of laws and regulations becomes a bigger and bigger part of how businesses structure their enterprises and investments. “Tax planning” is carried out by armies of accountants and lawyers and consultants, all of whom are handsomely paid to do work that contributes nothing to economic growth or prosperity.

The work of the “tax planning” professionals becomes more and more complex and incomprehensible to those outside their fraternity, as it is essentially the incantation of linguistic “magic spells” that have nothing whatsoever to do with the actual business enterprise, and everything to do with fitting into the ever-more-convoluted language of the tax codes. More and more layers of complexity are added, each with additional cost and uncertainty.

Why uncertainty? Because as the tax laws and regulations become more and more complex, and the language in which they are expressed becomes more and more divorced from normal usage, only very intelligent people who spend all their time doing nothing but learning and manipulating tax language can even begin to know what the laws and rules mean.

“One consequence of this process that everyone who is involved in international business knows very well is that no one wants to do business in the United States if they can help it.“

And they won’t all agree – until a very clear case is litigated to conclusion in a court or the IRS issues a “clarification,” it’s all just educated guesses. By the time a term comes to have well-understood meaning, the exceptions to the rules that use that term – using new words that were intentionally difficult to understand in the first place – have to be interpreted and clarified.

“And here’s the real horror: No one outside the fraternity of tax regulators, lobbyists, tax lawyers, accountants and consultants really perceives how enormous the structure of tax complexity is. Investors and entrepreneurs learn no more than they have to – just what they have to know to do the specific deal they’re working on or carry out their own narrow business operations.”

This process has been going on for well over a hundred years with no let up. In fact, the scale and complexity of the tax codes continues to grow exponentially, as the feedback process of high tax rates leading to exceptions leading to exceptions to exceptions continues ad infinitum.

“Unwinding all that complexity would wipe out huge swathes of the US economy – and create a whole new set of winners and losers that has nothing to do with the underlying matter of actually creating real value in the real world.”

One consequence of this process that everyone who is involved in international business knows very well is that NO ONE WANTS TO DO BUSINESS IN THE UNITED STATES IF THEY CAN HELP IT. This is the world I work in. In my professional world it is simply taken for granted that people with money to invest will do anything in their power to structure their business so that no possible argument can be made that they did business or invested in the US. Companies and wealthy individuals go to extreme lengths to avoid putting any kind of investment into the US if it is at all possible.

Does this mean that no one invests in US businesses? No. The US consumer market is too big, and innovation in the US is too valuable for that to be true. What it does mean, though is that below a certain very large scale, it just doesn’t pay. Even more important, it also means that every investment in the US is “taxed” in a way that does no one (outside of the business of avoiding tax) any good: Huge amounts of money are spent creating unnecessary complexity to minimize US taxation as much as possible: Extra layers of incorporation and complex accounting structures are created to do everything possible to minimize the amount of income earned in the US. All that time, effort and money spent avoiding US taxation adds to the cost of investment without creating one dime of revenue for the US government. Finally, foreign investors in the US do everything they can to get their money out of the US as quickly as possible: The more time an investment is exposed to US tax law, the larger the chance that some tax law magic spell will be countered by some other tax law magic spell and – BANG! – there go all the profits. Read the rest of this entry »

Shinzo Abe moved closer Thursday to securing passage of legislation that will allow Japan to participate in collective self-defense. After seven decades of sheltering under the U.S. security umbrella, the Prime Minister’s move would give Tokyo the ability to fight alongside an ally when either one is threatened, while protecting stability and democracy in East Asia.

The Cabinet adopted a new interpretation of Japan’s postwar Constitution last July allowing this cooperation. In April the U.S. and Japan announced new defense guidelines to put it into practice. On Thursday the lower house of the Diet approved the plan, and now the legislation moves to the upper house.

Progress hasn’t come easily. Most Japanese oppose the plan, and according to an Asahi poll, Mr. Abe’s approval rating has fallen sharply to 39%. There have been tussles on the Diet floor and raucous protests outside it. Mr. Abe will need the support of coalition partners with pacifist tendencies to prevail in the upper house, though he could still overcome a defeat there with a two-thirds majority in the lower one. Read the rest of this entry »

“Apple’s Gay CEO Tim Cook Wants to Boycott Indiana for Its Allegedly Anti-Gay RFRA, But Will Gladly Sell You an iPhone At Its Boutique in Riyadh, Where They’ll Stone You to Death For Being Gay.”

Ramesh Ponnuru writes: Tim Cook, the chief executive officer of Apple, is spreading misinformation about a new religious-freedom law in Indiana. That law and similar ones, he writes in the Washington Post, “say individuals can cite their personal religious beliefs to refuse service to a customer or resist a state nondiscrimination law.” He goes on to claim that they “rationalize injustice by pretending to defend something many of us hold dear. They go against the very principles our nation was founded on, and they have the potential to undo decades of progress toward greater equality.”

“What these religious-freedom laws say is that government can require people to violate their religious beliefs only when it is pursuing a compelling interest, and must do so in the least intrusive manner possible. Thus the Supreme Court recently ruled under a federal religious-freedom law that a Muslim prisoner doesn’t have to shave his beard.”

Discrimination against gay customers or employees is what opponents of the law are especially concerned about. But that’s a strange argument to make in the context of Indiana, which lacks any state nondiscrimination law on sexual orientation for people to resist. Discrimination on the basis of sexual orientation is legal almost everywhere in the state, and was before this religious-freedom law passed.

“Cook may not be aware of this point or others that cut against his argument because reporting on this controversy has been abysmal. Cook may also be unaware that the ‘wave of legislation’ that he fears has largely already happened. A very similar religious-freedom law has been on the federal books for 22 years…”

Cook may not be aware of this point or others that cut against his argument because reporting on this controversy has been abysmal. Cook may also be unaware that the “wave of legislation” that he fears has largely already happened. A very similar religious-freedom law has been on the federal books for 22 years, and that law itself codified a Supreme Court doctrine that had been in place for most of the previous few decades. Nineteen states besides Indiana have similar laws. Read the rest of this entry »

Wynton Hall writes: Embattled Health and Human Services Secretary Kathleen Sebelius said Wednesday that the Obama administration’s decision to extend the Obamacare open enrollment period is not, in fact, an extension.

“This is not an extension of open enrollment. It is just saying, like you do on election day, if you’re in line to vote, we want to make sure you vote.”

— Sebelius, to Michigan Fox 2

However, unlike election day, the Washington Post says the Obama administration will give people several weeks – until mid-April – to enroll.